Improving Civil Enforcement Processes for Financial Sanctions

OFSI proposes clearer guidance on how cases are assessed and how discounts are applied for voluntary disclosure and cooperation. This should incentivise early and open engagement with OFSI, but firms must ensure disclosures are comprehensive and timely.

The consultation includes proposals to update OFSI’s statutory penalty maximums, reflecting the evolving risk landscape and the need for proportionate deterrence. The statutory maximum penalty for breaches may double from 50% to 100% of the estimated value of the breach, with the default fine of £1 million also set to increase.

A new settlement scheme is proposed for monetary penalty cases, allowing subjects to resolve matters more quickly and with greater certainty. This could reduce the burden of protracted investigations, but will require careful negotiation and full disclosure.

The EAS would enable subjects under investigation to provide a complete factual account early in the process, potentially leading to faster resolution and additional penalty discounts. However, the scheme will only apply to appropriate cases and requires OFSI approval. 

OFSI plans to introduce indicative penalties and a simplified process for less serious breaches, such as late reporting or minor licence breaches. Not all failures will result in a penalty, but firms should expect shorter representation periods and a more consistent approach.

OFSI will continue to name parties subject to enforcement action, rejecting anonymised settlements to reinforce deterrence and public confidence.